< "> edit this post http://www.investegate.co.uk/afren-plc-%28afr%29/rns/trading-statement-and-operations-update/201301210700069619
http://www.investegate.co.uk/afren-plc--afr-/rns/2012-full-year-results/201303250700107200A/

In an attempt to cut down the header page,i've transferred some of the older news to Page1 post No.3.

http://www.oil-price.net/index.php?lang=en
http://www.ft.com/home/uk

http://www.investegate.co.uk/Article.aspx?id=201111020700081674R
http://www.investegate.co.uk/Article.aspx?id=201111150700250723S
http://www.investegate.co.uk/Article.aspx?id=201112010705051251T
http://www.investegate.co.uk/Article.aspx?id=201201170700146472V
http://www.investegate.co.uk/Article.aspx?id=201201230701479690V
http://www.moneyam.com/action/news/showArticle?id=4323758
http://www.investegate.co.uk/Article.aspx?id=201204170700164488B
http://www.investegate.co.uk/Article.aspx?id=201205140700212304D
http://www.investegate.co.uk/Article.aspx?id=201205210700407032D
http://www.moneyam.com/action/news/showArticle?id=4430164
http://www.investegate.co.uk/afren-plc-%28afr%29/rns/significant-new-seychelles-3d-seismic-programme/201212120700052973T/
http://www.investegate.co.uk/afren-plc--afr-/rns/2013-half-yearly-results/201308230700063334M/
http://www.investegate.co.uk/afren-plc--afr-/rns/ogo-drilling-and-resources-update/201311190700083404T/
http://www.investegate.co.uk/afren-plc--afr-/rns/trading-statement-and-operations-update/201401280700096280Y/
http://www.investegate.co.uk/afren-plc--afr-/rns/interim-management-statement/201405200700135209H/
http://www.investegate.co.uk/afren-plc--afr-/rns/interim-management-statement/201410300700116483V/
http://www.moneyam.com/action/news/showArticle?id=4942625
http://www.moneyam.com/action/news/showArticle?id=4943375

You play a lot of golf don't you Mr C? ;o)

i do indeed but never get the chance to invite clients to participate in prestigious events .... closest i get is a jolly for about a dozen of us at the BMW

Deutsche

View: Concluding the investigation draws a line under 3 months of uncertainty, enabling Afren to initiate the search for a new management team and start to rebuild investor confidence in the underlying business. To the extent that the findings confirm nothing substantially worse has been uncovered, today's announcement should reassure. There is also potential for Afren to recover up to $45m of misappropriated funds, subject to legal proceedings. As a consequence, we would expect the current discount to fair value to begin to close. Afren shares currently trade at 0.68x P/NAV (using spot Brent) versus a historic 0.75x P/NAV which suggests ~10% of upside should the historic multiple be restored. However, until a new management team is in place and strategy outlined, we see more favourable risk/reward elsewhere in the sector.

Liberum

'It appears to us that the damage to Afren should be limited. The economic loss looks relatively small, the only illegitimate contracts were entered into by the CEO and COO for their own benefit and partner bank government relationships should be intact.'

What now for Afren as bosses sacked?
By Harriet Mann | Tue, 14th October 2014 - 12:32
What now for Afren as bosses sacked?
Afren (AFR) has shown its chief executive, chief operating officer and two associate directors the door after an independent review confirmed all had received illegal payments from a Nigerian oil company. Clearly, there's relief that the review is over, but the company must begin the difficult task of restoring trust.

The scandal certainly raised concerns over Afren's internal controls, and the search is now on for a new management team. With stricter processes in place and a new king of the roost, Afren should emerge as a stronger company, crucial at a time when oil prices have sunk close to a four-year low.

Industry analyst and blogger Malcolm Graham-Wood believes what happens next for Afren is crucial.

"There is no doubt that this has seriously damaged Afren in a number of ways but if this really is the end of the matter there might just be a way back," he said. "The company will be vulnerable to a potential bid or competitors attempting to buy their assets on the cheap but it doesn't look terminal to me."
Illegal payments

In a review by Willkie Farr Gallagher, 11 employees - both past and present - were found to have benefited from payments from Nigeria's Oriental Energy Resources, including CEO Osman Shahenshah, COO Shahid Ullah and associate directors Iain Wright and Galib Virani.

In exchange for multi-million dollar funding (see below), Oriental paid 15% of the agreed net cash flows from its Ebok project into Ntiti Limited, a special purpose vehicle owned and/or controlled by CEO Shahenshah and COO Ullah. From the $45 million (£28.2 million) paid in for 2013, "extraordinary" bonuses were paid to themselves and other members of staff they didn't want to lose, the statement said. The CEO and COO paid themselves $17.1 million in bonuses that year. The Afren board are not thought to have known about the arrangement.

The review also looked into three instances of Afren allegedly failing to comply with reporting obligations; with two being found to have breached rules by WFG.
Avoiding disclosure

In 2012, Afren agreed to pay $100 million to Oriental and, in an effort to avoid disclosing the agreement under listing rules, Shahenshah organised the two tranche payments to be in lieu of oil from Oriental's Ebok project, thus a seemingly ordinary source of revenue. With the payment agreed to represent up to 5% of Afren's market capitalisation, the first payment of $93 million was followed by a further $7 million due to a rise in its share price. But due to an accounting error, this was an over payment representing 5.3% of Afren's market cap.

"The true nature of the First Oriental Agreement was not, in reality, an agreement for the prepayment of oil, nor was it a way of funding Oriental's costs in developing Ebok in a manner which might be considered to be in the ordinary course of business," the statement said. "It was a loan of $100 million to Oriental and was included in Afren's balance sheet for 31 December 2012 under the line 'prepayments and advances to partners'. Accordingly it was neither in the ordinary course nor of a revenue nature and should have been announced as a class 2 transaction on 25 July 2012 once the second tranche of $7 million was paid."

The second agreement with Oriental saw Afren Resources Limited (ARL) paid $300 million, around 12% of its market cap, for tax allowances and increasing the Afren's share of oil revenues from Ebok. Again, this was disguised as "ordinary" of Afren's business, but the review concluded that due to its size and incidence, it should have been declared. From the two-tranche payment $180 million has been returned and $120 million of tax benefits were noted in its financial statements.
Reassurance

From the $100 million loaned in the first Oriental agreement, $90 million has been returned to Afren, with the remaining $10 million expected by the end of the year.

Suggesting that today's news adds nothing substantial to the mix other than a degree of reassurance, Deutsche Bank reckons the current discount to fair value will start to close. With the shares currently trading on 0.68 times price/net asset value (NAV) using spot Brent against a historic 0.75 times, Deutsche believes the shares could rise by about 10%.

"However, until a new management team is in place and strategy outlined, we see more favourable risk/reward elsewhere in the sector," the analysts said.

VSA Capital doesn't seem convinced with a 'sell' recommendation and 90p target price on the stock.

The analysts said: "Having fallen by -43% year-to-date, Afren's share price is now trading near its core NAV. This is largely due to the legal issue described above negatively impacting the company but also accounts for slower than expected production growth with guidance revised by -15%, as well as weakening oil prices."

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

Article on Reuters at the moment titled "IEA sees 2015 oil demand growth much lower, supply hitting prices," so not sure drillers / producers are the place to be for the next year. Interesting to see which pumpers will be getting to the point at which it is unprofitable to produce. Around $80 pb (Brent Crude) seems to be the first critical level.

The shale gas producers will be the first to fold if the oil price drops to $80. This could be why OPEC is in no rush to cut production.

Afren have also hedged 5.2m bbl at a floor of $90 to $95 thro to June 2015

Just as well, as I have just seen the chartist on the IG website talking about Brent dropping to $70pb very quickly.

Oct 17 (Reuters) - Schlumberger Ltd, the world's largest oilfield services company, said oil and gas spending would increase in 2015 as global oil demand is poised to rise, downplaying fears of an investment slowdown due to weak crude prices. Schlumberger shares were up 7 percent at $97.10 in early morning trading. The company reported a better-than-expected quarterly profit after markets closed on Thursday, helped by strong drilling activity in North America. Oil prices have slid nearly 20 percent since June due to oversupply, signs of weak demand growth and indications that key oil producers, particularly Saudi Arabia, have limited appetite to intervene in prices. The steep fall has sparked fears that oilfield earnings would be hurt with oil and gas customers reigning in spending. "The key to the overall oil market is still that the global oil demand is currently set to increase by 1.1 million barrels per day in 2015, which will require growth in exploration and production investments," Schlumberger Chief Executive Paal Kibsgaard said on a post-earnings call on Friday. The International Energy Agency earlier this week cut its 2015 estimate for oil demand growth by 300,000 barrels per day (bpd) to 1.1 million bpd, citing weak global economies. Oil demand was "largely unchanged", while supply was relatively "well balanced," Kibsgaard said on the call. "WTI oil at $80 a barrel for a short time is unlikely to have an impact on growth and margins for the services companies, but $80 oil for more than a month or two certainly will," William Blair & Co analysts wrote in a note. They expect the company to "wait and see" how $80 WTI would impact producers' spending plans. West Texas Intermediate crude was at about $83 per barrel on Friday, while Brent crude was over $87. Baker Hughes Inc, the world's No.3 oilfield services provider, said on Thursday that drilling activity was unlikely to slow unless crude fell to and remained at $75 for a few months. Still, Schlumberger expects 2014 exploration spending to fall by 4-5 percent from a year ago, largely due to a 20 percent fall in seismic expenditure. Oil and gas companies are spending more on maximizing production from existing wells, than on searching for new reserves as they face increasing investor pressure to raise shareholder returns. Up to Thursday's close, Schlumberger shares had fallen more than 20 percent over the last three months due to the sharp slide in crude prices. - See more at:

Halloween stock picks which could be winners but are still not for the faint hearted‏
27 October 2014

Afren

The unauthorised payments investigation on the back of management activity is a stab in the back for Afren investors. Additionally, the recent slump in the price of oil along with the instabilities in Iraq could leave them feeling weak at the knees and sees the risk profile of the stock frightfully high. However, for those feeling brave, we recommend Afren as a ‘buy’. The lower share price and a p/e multiple of 8 times means the shares once again look attractive. The company has been building on its impressive production growth rate of the past few years and we believe it has the potential to continue.

- See more at: hxxp://www.mindfulmoney.co.uk/investment-insight/investing-strategy/halloween-stock-picks-which-could-be-winners-but-are-still-not-for-the-faint-hearted%E2%80%8F/#sthash.ku8Ydfdk.dpuf

http://www.investegate.co.uk/afren-plc--afr-/rns/interim-management-statement/201410300700116483V/

Deutsche Bank reiterates hold on Afren, target cut from 130p to 110p.

Hold until it's 70p

LATEST BROKER VIEWS

Date Broker New target Recomm.
30 Oct VSA Capital 115.00 Hold
30 Oct Westhouse... 110.00 Neutral
30 Oct Deutsche Bank 110.00 Hold
28 Oct Credit Suisse 115.00 Outperform

Chartist considers 72p support level?

worth a tickle

Yep !....going long...drop well overdone...

Buying?

I will wait till the late 2011 support at 72p is being reach.
The way the share price is moving lower it could easilly fall to that price, and if bounces from there, then it would be the right time to get in, as there is a strong support line at 72p.

That's just guesswork....to me this looks like an absolute bargain at this level....